Georgia to Build a Pipeline Bypassing Russia

Georgia to Build a Pipeline Bypassing Russia

After Azerbaijan and Turkey signed an inter-governmental agreement in Istanbul on construction of Trans Anatolian Pipeline (TANAP) on June 26, Georgia started talking about another Nabucco rival project. According to local mass media, Minister of Foreign Affairs of Georgia Grigol Vashadze announced that Georgia is ready to implement AGRI (Azerbaijan-Georgia-Romania Interconnector) pipeline construction project, which will supply gas from the Caspian region to Europe bypassing Russia. He also added that although Nabucco is fundamentally important project, its implementation is postponed from year to year. So Georgia offers AGRI, as it is much cheaper and much faster to carry out than Nabucco.

In 2010, the presidents of Azerbaijan, Romania and Georgia signed a memorandum on implementation of the project. The AGRI is a proposed project to transport Azerbaijani natural gas to Romania and further to Central Europe. Natural gas would be transported by pipeline from Azerbaijan to the Black Sea coast of Georgia. The liquefied natural gas export terminal (LNG plant) would be built. Liquefied natural gas will be transported by LNG tankers to the Constan?a terminal in Romania. After regasification natural gas will be delivered through the existing gas grid to Romania and other European countries.

According to business newspaper "Vzgliad", the prospects for Nabucco are vague, as it is too expensive. It was found that the project cost will be US$ 19 billion instead of planned 10 billion. In addition, it simply had nothing to fill, as pipeline from Azerbaijan to Europe will carry 10 billion cubic meters gas a year. This is only a third of the Nabucco capacity. So project managers decided to reduce the pipeline length of almost three times. Short version of Nabucco will be about 1300 kilometers long, and it will run across the 4 countries starting from Turkish-Bulgarian border to Austrian Baumgarten city.

However Russian experts believe that AGRI Implementation chances are quiet low, because of low capacity. According to analyst Gregory Birg, AGRI project cost less than the main alternatives are considered, and may be about US$ 2-5 billion to build, depending on capacity, which may vary from 2 to 8 billion cubic meters a year. At the same time the cost of the "South stream" can reach US$ 20-25 billion (63 billion cubic meters) and the construction of Nabucco(31 billion cubic meters), according to some estimates, may be only a little cheaper.